In 2018, will Bitcoin turn out to be another pets.com-style overhype, an Amazon.com surprise or just what it is: the beginning of a new type of digital currency going through its ups and downs?
As an investment, many academics urge caution, as some projections say that Bitcoin could reach a price of $20,000 or more in 2018. It is clear that the price of Bitcoin skyrocketed in 2017, but it is far from certain what will happen to the currency next year.
Early this week, Bitcoin was selling for well over $11,000. There are those who predict the price of Bitcoin will continue to increase next year. “I don’t think it is going to stop any time soon,” Ronnie Moas, founder of Standpoint Research, told ThinkAdvisor.
He recently predicted that the target price of Bitcoin is $20,000 for 2018 – and it “could go higher,” he said. “It would not shock me to see it hit $100,000 next year.”
Moreover, if the Securities and Exchange Commission approved an exchange-traded fund for Bitcoin, “there would be a stampede,” Moas said. “There wouldn’t be any Bitcoin availability.”
“I could see money coming out of the stock market and people doing this on their own,” Moas added.
Recently, the U.S. commodity Futures Trading Commission approved Bitcoin futures trading on the Chicago Mercantile Exchange. “It was like a stamp of approval,” Moas said.
But Moas also cautioned he does not have a “crystal ball” and investors may want to have a diverse portfolio of coins, not just Bitcoin. For instance, another currency, Iota, recently jumped in value.
This interest in Bitcoin is also being seen by many financial advisors whose clients have been asking about investing in the currency.
(Related: Bitcoin Goes Bonkers and So Does Twitter)
“Advisors are being asked about Bitcoins and cryptocurrency today, and this puts advisors in a really tough spot,” Jamie Hopkins, a professor at the American College of Financial Services, said. “The reason it’s a tough spot is that most U.S.-based advisors don’t have a great deal of experience with currency trading and investing. In other countries, currency trading is much more common than in the U.S. As such, advisors are often ill-prepared to discuss the benefits or drawbacks of general currency trading, let alone a digital currency.